Image, brand and relevancy might not be the first words that come to mind when thinking about the legal industry’s use of space, but for the first time in decades these concepts have worked their way into law firms’ collective consciousness. Let me explain…
I have tracked law firms in Los Angeles for a long time. Over the last 20 years, I have watched them expand, merge, contract, relocate and become insolvent—the delicate phrase applied during the Great Recession.
Seventy-five of the 100 largest law firms in the country operate offices in the region. Since 2014, firms that rightsized reduced their office space by an average of 32 percent as their leases expired. Other industry sectors scaled back office space requirements to be more cost effective, and I expected law firms in L.A. to follow suit—but it didn’t happen the way I thought.
Historically, most L.A. law firms had one primary location, usually located in either Century City or Downtown Los Angeles, typically to be near the partners’ homes or the courts. Because L.A. rents, particularly downtown, have historically trailed other primary East and West Coast office markets, L.A. law firms have had the luxury of being less rent conscious and therefore not necessarily as space efficient as law firms with offices in other office markets. Also, Downtown L.A., with a historical vacancy rate consistently in excess of 15 percent for its more than 30 million square feet of office space, provided little to no pressure to downsize. With the increased use of technology, small changes were introduced, such as reduced law libraries and support staff workstations, but there wasn’t a massive movement in the industry to make major alterations as to how space was utilized.
Over the last three years, however, law firms—arguably one of the more change-resistant industries—have begun to slowly rethink their use of office space, embracing elements of the creative office movement, such as implementing more natural light. (A recent Harvard Business Review study revealed the most highly sought-after office perk is natural light.) On a national level recently, law firms have been standardizing their design to cut expenses, but the trend to renovate space here in this West Coast metropolis has less to do with cost savings and more to do with brand, image, recruiting and clients. Why? L.A.’s job market is highly competitive. Legal services are a major industry sector, employing 67,000 people as of 2017, up 4 percent from 2015. Law firms fighting for the best talent to win business, especially in this region, must be increasingly savvy in catering to a young workforce that’s not looking for aged symbols of status and prestige.
L.A. is a bustling technology, media and entertainment hub. In order to appeal more to this generally hip and edgy client base, law firms representing these innovative companies can no longer operate in the archaic realm of big corner offices donned with images of men on horseback and hunting dogs. So, the drive to appear relevant and relatable to clients has impacted space utilization and is finally bringing law firms in L.A. into the era of workplace evolution. Plenty of traditional design can still be found in large, mid-sized and boutique firms, but a significant number have incorporated design changes such as interior attorney offices, amenities, more flexible space and open-seating designs for associates, such as at Latham & Watkins, which now operates a full floor with open seating.
In an effort to remain in lockstep with their evolving client base, law firms are also becoming nimbler in terms of their address. Some firms have relocated from Downtown to the Westside, or vice versa, or opened second offices in another L.A. submarket. Currently, 19 of L.A.’s largest 75 firms have secondary offices either Downtown or in West L.A. and Santa Monica’s white-hot scene led to a half a dozen firms opening secondary offices over the past several years. No matter where the firms have moved, the commonality lies with proximity to clients and a strong brand engagement.
So, while some L.A. firms are still exclusively hanging on to their wood-paneled corner offices located near the courts or their partners’ homes, the need for relevancy and an edge with the next generation of workers and clients alike has cracked open the door at many a firm to the concept of 21st century workplace strategy.
Petra Durnin is the director of research and analysis for CBRE Southern California and Hawaii.